LATEST ARTICLES

Finding a Bottom and Model Portfolio First Half Returns

By Tom Konrad, Ph.D., CFA Even as the broad market rose, the start of 2021 was brutal for clean energy stocks. The sector experienced a bubble in late 2020 and January this year as optimism grew that we finally had a President who understands the magnitude of the climate problem and has committed to do something about it. The bubble also grew from the great hope that with the presidency and slim majorities in both houses of congress, he would actually be able to get his agenda through. That might have happened if the Senate Republicans were interested in governing and...
Supreme Court courtroom

A Disappointing Supreme Court Biofuel Decision. Why It’s Not Over Yet

By Jim Lane The case Last week’s decision stems from a May 2018 challenge brought against EPA in the U.S. Court of Appeals for the Tenth Circuit by the Renewable Fuels Association, the National Corn Growers Association, National Farmers Union, and the American Coalition for Ethanol, working together as the Biofuels Coalition. The petitioners argued that the small refinery exemptions were granted in direct contradiction to the statutory text and purpose of the RFS and challenged three waivers the EPA issued to refineries owned by HollyFrontier Corp. and CVR Energy Inc.’s Wynnewood Refining Co. The case is HollyFrontier Cheyenne Refining, LLC v....

Eneti and the Jones Act

By Tom Konrad, Ph.D., CFA About a month ago, an astute reader asked me if Eneti's (NETI) contracted Wind Turbine Installation Vessel (WTIV) would be able to operate in US waters since it will not be compliant with the Jones Act.  For those not familiar, the Jones Act requires that all transport of goods between US ports must be done by vessels built in the US, and owned and operated by US citizens. I looked into it, and concluded that it probably could, since installing wind turbines is not transport, but rather lifting (jack-up, in the parlance), an exemption which is...

Alkaline Electrolyzers – The Future needs a Metamorphosis

by Ishaan Goel The second article in this series on water electrolyzers focused on polymer electrolyte membrane electrolyzers (PEMEs). PEMEs have increasingly captured the interest of industry over recent years, due to favorable technical characteristics. Despite this, the global electrolyzer market today is dominated by a much older model - alkaline electrolyzers (ALKEs). (For details of how both electrolyzers work, refer to the first article in the series). The graph above shows the investment costs ($/kW) of ALKEs and PEMEs as the technology has advanced over time. In other words, they show the initial capital cost for every 1 kW of...
DSI vs AVCI top holdings

Are ESG Funds All That Different?

by Jan Schalkwijk, CFA ESG investing is all the rage these days. That is, investing that includes the non-traditional  environmental, social, and governance factors in the investment process.  Its appeal to the broader investment industry is twofold: 1) The writing is on the wall: as wealth is passed down to younger generations who in the aggregate care more about values alignment, the asset management industry does not want to lose the assets and the fees they generate. 2) Thematic investing is popular and ESG is one of the hottest themes. Wall Street is not going to miss out. Much like crypto...

Buying Innergex – Texas Was Bad, But Not That Bad

By Tom Konrad, Ph.D., CFA Last week, I published this call to buy Innergex (INGXF, INE.TO) because investors had been overreacting to the losses from the February cold snap in Texas.  The stock is up since then, but still seems a decent value. Canadian Yieldco Innergex Renewable Energy (INGXF, INE.TO) took a big financial hit from the power disruptions in Texas in March.  It's complex, but their financial hedges on power prices for three of its wind farms ended up creating enormous liabilities - more, in fact, than two of their wind farms are worth.  Two of their facilities also had benefits...

Atlantica Q1, Buying Hannon Armstrong

By Tom Konrad, Ph.D., CFA Here are two more updates from last week on Patreon.  Also, I realize I neglected to publish the monthly performance chart for my 10 Clean Energy Stocks model portfolio here at the start of the month, so here it is as well: Atlantica Sustainable Infrastructure Earnings (published May 11th) Atlantica Sustainable Infrastructure (AY) released its first quarter earnings announcement and financial statements on May 6th. Atlantica is one of the higher yielding Yieldcos, 5.3% at the new quarterly dividend rate of $0.43 and a $32.50 stock price.  The dividend is safe, since most of Atlantica's debt is fixed rate,...
Pinellas

Earnings Roundup: Metals Prices Boost Covanta and Umicore

By Tom Konrad, Ph.D., CFA You don’t have to own mining companies to benefit from rising metals prices. This is a roundup of first quarter earnings notes shared with my Patreon supporters over the last week. Waste to energy operator Covanta and specialty metals recycler Umicore are both benefiting from skyrocketing metals prices. Just as renewable energy and energy efficiency stocks have long shown that investors don’t have to own fossil fuel companies to benefit from rising prices of fossil fuels, recyclers like Covanta and Umicore are showing that you don’t have to own environmentally damaging mining companies to benefit from rising...

PEM Electrolyzers – Cracking the Chicken and Egg Problem

by Ishaan Goel The first article in this series introduced two prominent types of water electrolyzers – alkaline electrolyzers (ALKEs) and polymer electrolyte membrane electrolyzers (PEMEs). Electrolyzers are devices that convert water into hydrogen and oxygen using electricity. They enable energy storage through hydrogen when combined with fuel cells, and can decarbonize hydrogen production for industry if supplied with renewable power. Subsequent articles shall focus on various characteristics of these two electrolyzer variants. The graph above shows the investment costs ($/kW) of PEMEs and ALKEs as the technology has advanced over time. In other words, they show the initial capital cost...

Q1 Earnings Roundup: Yieldcos (AGR, BEP, CWEN, GPP)

By Tom Konrad, Ph.D., CFA This is a roundup of first quarter earnings notes shared with my Patreon supporters over the last week. If there is any theme, it’s that low interest rates and increased interest in green investments is lowering Yieldcos’ cost of capital to the benefit of stock investors. Avangrid Earnings Avangrid's (AGR) Q1 earnings report showed solid progress.  Key items of note were: Increased outlook for full year 2021 Adjusted EPS a little over 5%  Key environmental approval for 800 MW offshore wind farm Vineyard Wind. Expected to begin construction later this year, with expected completion in 2024.  Avangrid...

The Solar Industry’s Supply Chain Problems

by Paula Mints The solar industry has a supply chain problem – no, not just the current polysilicon and glass constraints. Solar wafer, ingot, cell, and module manufacturing are concentrated in China and South East Asia, leaving buyers outside these areas vulnerable to supply chain shocks. Countries in this region have lower labor costs, lower energy costs, and higher incentives and subsidies for manufacturers. In China, manufacturing is supported (and controlled) by the central government. Manufacturers in China, who have expanded into South East Asia, can make do with lower margins than their counterparts in other countries. Manufacturers in South East Asia and China...
10 Clean Energy Stocks Mar 21

Clean Energy Stock Deflation and Biden’s Infrastructure Plan

By Tom Konrad, Ph.D., CFA Last month saw buying opportunities in some clean energy stocks as the bubble created from the euphoria over Biden’s election vanished as if it never happened. Clean energy stocks have simply returned to the general upward trendline from the second and third quarter of 2020.  Rather than bursting in a market panic, this seems to have been more of a general deflation. Some clean energy stocks seem reasonably priced, but there are no great values like we often see during the market panics which typically follow bubbles.  Without a panic, I’m not ready to buy aggressively.  Stocks...

Discom-fort: Barriers to Renewables in India

by Ishaan Goel Energy is crucial to India’s policy agenda. Millions of households are yet to gain reliable access to electricity, hampering their potential for economic growth. Severe pollution issues create widespread health problems. Renewables are prioritized as viable solutions across the political spectrum, with their low costs and ease of installation in remote regions. The current administration has ambitious plans for renewable energy (RE), targeting an almost 4x increase in installed capacity to 450 GW by 2030 and introducing a spate of tax and investment reforms. At the heart of the Indian power supply chain lie distribution companies (discoms). The...

Pop Goes the Clean Energy Stock Bubble

by Tom Konrad, Ph.D., CFA 2020 ended with a massive spike in clean energy stock prices.  From the end of October, election euphoria drove Invesco WilderHill Clean Energy ETF (PBW) from $63.32 to $136 at the close on February 9th, a 114% gain in 100 days.   Joe Biden is as strong a supporter of clean energy as Donald Trump was a supporter of big fossil fuel companies, but even with control of the presidency and both chambers of congress, there is a limit to what a president can do in a short time.  This is especially true when their top priority...

10 Clean Energy Stocks: Returns Through February/ Poll

by Tom Konrad Ph.D., CFA I'm experimenting with how to display the returns of the 10 Clean Energy Stocks model portfolio.  My Patreon supporters seem fairly evenly split between the two options show below, so I'm opening the poll up to my broader readership. You can see the two most popular options below (with real return data through the end of February) and take the poll here. Comments are welcome as well. DISCLOSURE: Long all stocks in the model portfolio.
Covant 4Q 20 earnings

Covanta and Hannon Armstrong Earnings

by Tom Konrad, Ph.D. CFA Two more earnings notes I shared with my Patreon followers on February 18th. Covanta Holdings (CVA) Leading waste-to-energy firm Covanta Holdings (CVA) announced 2020 earnings today.  There will be a conference call tomorrow morning, but here is my high-level impression: The company managed well through Covid and ended the year within it's original pre-covid guidance.  Metals and energy prices, as well as increased maintenance capital expenditures were a drag on results, but  prices are improving and capital expenditures will fall in 2021. The company is conducting a strategic review which will likely result in the sale of some underperforming...